Shell gives green light to first big North Sea project in 6 years

Royal Dutch Shell has approved its first significant development in the North Sea in more than six years, in a sign that big energy companies are still on the hunt for opportunities in one of the world's most mature oil and gas basins. Shell said it would redevelop the Penguins field north-east of the Shetland Islands, together with its partner ExxonMobil, in a project expected to cost more than $1bn. The decision marks one of the biggest investments in the North Sea since oil prices crashed in 2014 and will increase confidence that the UK oil and gas industry is gradually recovering after a brutal downturn. Last year, Shell sold more than half its UK production base to Chrysaor, a private equity-backed company, in a deal that reinforced perceptions that the biggest oil and gas producers were retreating from the North Sea. Shell, which operates Penguins in a 50-50 partnership with Exxon, said it would be the first new manned installation in the northern North Sea for almost 30 years. There had been fears after the 2014 oil price crash that younger North Sea fields such as Penguins, first developed in 2002, and remaining untapped resources would be left stranded as oil companies decommissioned old platforms and pipelines.